Case Study 2008/9 - Customer Support Division Turnaround
Customer Support Services Project (2008-9).
The Customer Support Services (CSS) provision for a $250m global Canadian independent software vendor (ISV) required new focused and inspirational leadership to reduce costs and improve operating processes.
The CSS function had become fragmented regionally, reporting in to local sales/marketing management, and costs appeared to be too high for the size of the business, having risen over time to an annual run-rate of $5.3m by Q4 of 2007. The owners of the company had set a target to the Board of reducing this to $3.8m.
In January 2008 Stuart Lester was asked to take over global responsibility for the group, specifically to resolve organisational issues and achieve the required cost reduction.
For the next 6 weeks detailed analysis of all costs by type and geography was undertaken so that full clarity on every item of expenditure was available. All purchases and new hires required personal approval. Monthly forensic tracking of costs became standard practice. All managers were fully engaged into the task of cost reduction and included in devising plans to achieve it.
Many of the existing mid-managers had great ideas on where cost was being wasted, but lacked belief in their own ability or authority to bring about change. All were given the empowerment and support required to change their mindset.
Staff were tasked to identify and quantify the big inbound call-generators. Call agents needed to be engaged in the aim of the project to commit time to this as they were already struggling with call volumes and irate customers. The collated results were prioritised and escalated to engineering, product management or IT to resolve the issues and eliminate the need for the calls at source. Other departments in the company were made aware of the overall objective of the CSS cost reduction project to get their full focus and prioritisation.
At the same time, all workflow, systems and processes were reviewed. Agreement was reached that customers should be encouraged to seek on-line help before being given access to free phone lines. Web support and knowledge base content was rapidly improved. Workflow was adjusted for customers so that they could only access free-phone numbers after going through on-line support systems to try to find their own technical solutions first. Agreement was reached with senior management that customers wanting to order should be directed to the on-line e-store rather than being encouraged to call on free phone lines unless they needed help. It was agreed that possible loss of up-sell and cross-sell was less important than the cost reduction, and marketing were tasked with achieving e-store improvements to cover.
As a result of these initiatives, call volumes in the main centres dropped by 40% within the first 6 weeks of the programme, significantly reducing staffing requirements, and improving customer satisfaction as abandon rates and wait times all tumbled. This also allowed staff breathing space to identify further improvement opportunities.
Over the following 14 months an extensive and intensive plan of improvements were implemented across all areas of the division, in all locations. No stone was left unturned in ensuring best practice and cost-efficient delivery. Areas of improvement included the following:
- English language emails were routed to low-cost Manila support centre, leaving in-region centres to focus on phone calls.
- Set up automated shipping confirmations to customers.
- Enforced existing rules for charging for “help” (i.e. non-fault) technical calls.
- Kan-ban stocking for e-store products and orders to almost eliminate stock-outs.
- Changed to more reliable carriers for phone and e-store orders.
- Enforced OEM product rules to refer customers back to OEM vendors for support.
- Blitz on overdue reverse logistics issues to eliminate chaser calls.
- Redesigned whole support site and rolled out across all regions/languages.
- Renegotiated contracts with enterprise systems software vendors.
- Created on-line help videos.
- Implemented “Chat” software help in English language manned by Manila night shift.
- Fixed issues with on-line e-store order systems to ensure smooth customer experience.
- Redesigned IVR (phone answering management system) to segregate calls and stop misuse of free-phone lines.
- Moved Latin American support to local office.
- Renegotiated third party support contracts for Eastern European languages.
- Stopped provision of support for obsolete products and sold upgrades instead.
- Enforced charging rules for product ‘help’ calls.
- Enforced serial number registration to stop supporting illegal product.
- Created on-line reverse logistics application system.
- Set up Voice-over-IP (VoIP) system to load balance calls between Canada and Manila night staff.
At the same time as all these activities were taking place, comprehensive global KPI metrics and dashboard reporting on performance and cost were created and presented regularly to Board members and staff both monthly and quarterly.
Workload reductions led to cost savings through staffing reductions, but these were almost completely due to natural wastage, redeployment and termination of contract staff at the end of their contract periods.
Key Results:
· Within 18 months global costs had been reduced by 34% saving almost $2m annually
· Inbound call volumes had been halved
· Customer complaints were reduced from an avalanche to a trickle allowing personal attention to each
· Customer satisfaction benchmarking surveys showed dramatic improvements
This case study demonstrates that the right leadership and focus can bring about dramatic improvement at a divisional scale to an area where senior management had previously been frustrated by apparent barriers to progress.
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Last Updated (Tuesday, 04 January 2011 18:19)